Kathmandu, June 17

After perennial delays in setting up industries in the Bhairahawa Special Economic Zone (SEZ), the SEZ Authority Nepal has urged the industries selected through competitive bidding process to start site mobilisation within two weeks.

Chandika Prasad Bhatta, executive director of SEZ Authority Nepal, has said that the authority will not provide further relaxation to the investors. A total of 26 industries were selected to set up industries in the country's first SEZ.

The industries that have been selected through the open competition are taking more time to set up their industries citing lack of electricity for site mobilisation. However, Managing Director of Nepal Electricity Authority (NEA), Kul Man Ghising, has said that NEA can provide adequate power to start construction process of industries. And after nine months, industries in Bhairahawa SEZ will get up to 30 megawatts of electricity, according to him.

Industries established in the SEZ will get various fiscal incentives and procedural facilitation in registration, bringing investment and during exit as the government has developed the SEZ to boost the country's exports. These industries must export 75 per cent of the produced goods. However, the industrialists have expressed certain reservations on export provision and rent during the discussions organised here today.

Speaking in a programme titled ‘Accelerating Industrialisation in Bhairahawa SEZ', Hari Bhakta Sharma, president of the Confederation of Nepalese Industries, said that the government should bring down the export provision to 60 per cent for certain years and also pay attention on other incentives and facilities for the industries going to be established in SEZ.

There are a total of 69 plots in Bhairahawa SEZ booked by 26 industries. Industrialists who were going to set up industries in SEZ have said that they will begin site mobilisation as early as possible as the issue of electricity has been sorted out. However, the interest rate of banks and lack of credit availability has been adversely affecting their plans, according to industrialists in the Bhairahawa SEZ.

Similarly, former president of the Federation of Nepalese Chambers of Commerce and Industry, Pradeep Kumar Shrestha, said that the government should take private sector into confidence to achieve high growth target citing that the SEZs can play a pivotal role in addressing the supply side bottlenecks of the country, which is the major challenge for boosting exports.

Shankar Sharma, former vice chairman of the National Planning Commission, said that SEZ could play an instrumental role in generating employment and strengthening the sustainable growth of the economy. Citing the contribution of the manufacturing sector in gross domestic product has plummeted heavily in the last one-and-a-half decades, he said investment, innovation and fiscal and non-fiscal incentives can give a big push for the country's stagnant industrial growth.

Chief Executive Officer of Investment Board Nepal (IBN), Maha Prasad Adhikari, opined that the private sector should also come forward to develop SEZs as the SEZ Act has a provision of developing SEZs by the private sector. He further stated that the IBN has been eyeing big investments in SEZ.

Laxman Bahadur Basnet, executive director of Nepal Intermodal Transport Development Board, underscored the need of robust trade infrastructure to bring down the cost of trade logistics. Railway linkages to SEZs, less hassles on roads while importing and exporting raw materials and finished products and development of backward and forward linkages are essential to raise competitiveness of production sector, as per Basnet.